In the ever-changing world of private markets, digital transformation has become the norm. Additionally, due to economic pressure and market turbulence, there is a greater demand for operational efficiencies, accurate information, and enhanced analytics to drive business performance and decision-making.
As Private Market companies seek to remain competitive and uncover such efficiencies, a robust data framework is the place to start. To leverage digital opportunities, companies must build the necessary foundations with scalable technology platforms and best-in-class data processing. In this article, we examine the key components of developing a data strategy with specificity and focus on private markets.
Garbage in, Garbage out
Your decisions are only as good as your data. For Private Capital, this means making data-driven decisions to develop investment proposals, identify target companies and assets, or enhance portfolio management.
Our research suggests that data is increasingly becoming the main limiting factor for private markets, as it is often not accessible or ready for analysis or visualisation. What could be more appealing than making faster, better decisions in real-time to enhance portfolio performance? Yet companies, teams, and people spend days and weeks collecting information rather than spending time on analytics and analysis.
The Cultural Challenge
Many companies fail to recognise the importance of developing a coherent data strategy and are reluctant to change. This strategy needs to be front and centre of the CEO's agenda, defining organisation-wide objectives, supported by leadership with a clear and consistent engagement plan, enabling employees across the organisation to understand the true value of data and how it contributes to achieving their goals.
Key components to consider when developing a data strategy:
Highlight Success: Always carry out a current-state assessment, as measuring backwards is the best way to track your achievements and demonstrate how far you have come. Measuring success is more than just keeping track of your wins.
Data Governance to Scale: Implement consistent standards across all governed data and designate data owners who will advocate for data quality and compliance. Clearly articulate the purpose of your data model, why it exists, and how it supports company vision, scaling, and growth ambitions.
Technology stack: Set up a robust tech infrastructure. Data-driven decision-making requires integrating data from various sources. Invest in tools that facilitate data collection, analysis, and visualisation.
Think Big, Start Small: Begin with low-hanging fruit and manageable projects and expand over time. Show value early with quick wins to gain buy-in and support from stakeholders.
Opportunity for growth
Implementing a robust and scalable data strategy and model takes commitment, courage and capability. However, get this right, and the results can turn a siloed and disconnected organisation into an integrated, connected benchmark-setter.
Who not how
Consider partnering with data specialists with a compelling track record within private markets. This will save you time and money and free up your internal resources to focus on business as usual. As Greg McKeown once said, “An Essentialist produces more—brings forth more—by removing more instead of doing more”.
Speak to our team today. We can show you how and help guide your company in realising the true value of data-driven performance.